WTF is PsyOptions?
PsyOptions is a Solana-based American style options protocol.
At its core, the core protocol aims to be built around composability and flexibility. These are the two principles that have guided its architecture and development.
PsyOptions is 100% trustless. The core protocol does not make assumptions on the activity or price of individual options.
Options in the PsyOptions protocol are represented as SPL Tokens. This means they can be traded on any DEX that supports SPL Tokens.
PSY is purely a governance token that follows the COMP governance model.
PsyOptions V1 supports 100% asset-settled, centralized, covered calls and secured puts.
What makes PsyOptions unique?
Around the end of 2020, the founding contributors came together with a mutual goal. They wanted to automate a yield generating, options trading strategy in TradFi.
They were immediately rejected by brokerages when they called to inquire about API access.
The idea for PsyOptions was born after the founding contributors participated in the first Solana hackathon.” They failed to place at the first Solana hackathon, but went on to win the second Solana hackathon alongside Mango Markets.
Thus, anyone would have API access inherently built-in so they could automate any strategy they’d like.
By the words of the founders, PsyOptions was born out of necessity. PsyOptions democratizes access to resources and products typically restricted to TradFi incumbents.
PsyOptions wants to bring a TradFi feel to the entire DeFi sector. How? By building a decentralized, community-owned, permissionless financial services platform. And not only build one but become the de facto on-chain financial services platform for DeFi users.
Their initial protocols are a brave first step on the path to achieving this goal.
What’s the utility of PsyOptions?
Interacting with options
There are five fundamental parameters that the protocol uses to interact with options markets:
- The underlying asset
- The quote asset
- Contract size
- Strike price
Any user could then initialize a market simply by supplying these values as arguments. The fungibility of option SPL tokens will be determined by each parameter.
Writing an option
To write an option, the writer has to lock the underlying asset in a specific amount.
- SOL/USDC option has an underlying asset size of 500 SOL.
- 500 SOL will be locked in order to mint the option token.
- The option writer receives two SPL tokens.
The first token represents the option. The user may sell this to generate yield.
The second token represents the written contract. It is essentially the claim on the underlying asset. It can be exchanged for the underlying asset after it expires.
Exercising an option
The holder of the option token has the ability to swap the quote asset for the underlying asset. It is up to the token holder to decide whether or not to exercise his option, regardless of whether the option is in the money or out of the money.
When exercising an option, the holder locks a specific amount of the quote asset. This amount is equal to the strike price multiplied by the underlying size of the asset.
The options token is burned, and the holder receives the locked asset.
PSY is a governance token. All holders of the PSY token have the ability to upgrade the protocol as they see fit. Collectively.
PsyOptions follows the COMP governance model. It is considered by many to be the gold standard in the industry.
Any member with 0.1% of the PSY token delegated to their address may propose a governance action.
This can include:
- Adding support for a new asset.
- Changing a market’s interest rate model.
- Changing an asset’s collateral factor.
- Changing any parameters of the protocol that can be verified by the current administration.
Every proposal is subject to a 3-day voting period. Any address with delegated PSY can vote for or against the proposal. If at least 2% of the PSY token supply are cast for the proposal, it is queued and implemented two days later.
Who’s the team behind PsyOptions?
The core contributors of PsyOptions include:
- Tommy Johnson: Tommy is one of the winners of the Solana x Serum DeFi Hackathon. He is one of the original contributors to PsyOptions. He has been building on Solana since its early days. He brings over ten years of engineering experience to the PsyOptions team.
- Taylor Johnson: Taylor is another member of the team that won the Solana x Serum DeFi hackathon. He also brings over ten years of engineering experience to the team. He is the leading front-end developer of PsyOptions.
- Spencer Farrar: Spencer was previously an asset manager with $4bn AUM at Bienville Capital. He led their crypto-focused fund. He is focused on leading the strategy and business development at PsyOptions.
- Whiteseal: Whiteseal is one of the lead protocol developers at PsyOptions. He holds a doctorate in Computer Engineering with a focus on cybersecurity.
- T-Wall: T-Wall is a PsyOptions community manager that solves problems for everyday users. His core passion? Connecting technology and community.
- stockmart: The resident DeFi Degen, stockmart is primarily focused on research and governance at PsyOptions.
Who are the advisors?
PsyOptions has attracted a vast network of contributors and partners.
- XYZ – Contributed to the product planning, engineering, branding, and vision behind PsyOptions.
- HypeQuant and SchrodingerVibes – Building a sophisticated options market making bot.
- DevExpert127 – Built the PsyOptions Business Intelligence Dashboard.
- CopyCat – Helped the team with Chinese translation.
- KoldBreu – Design contributor.
- EvanP, DeeDee, and RAD – Derivatives quant advisors.
- 0xBenchy – Community and partnership contributor.
- Khalid and Juna – International Community Moderators
The team of contributors at PsyOptions is ever-growing.
This only goes to show that the community needs a decentralized, community-owned, permissionless financial services platform. The team and its contributors know the market needs it. And now, the community has come together to create it.
The Up Shot
PsyOptions is a Solana project that aims to make writing and executing options easy and straightforward. All this inside a decentralized, trustless options protocol.
With a strong community and an experienced team of developers behind it, it has the potential to become one of the best financial services platforms on Solana.
PsyOptions is one project you must keep an eye on if you are:
- Curious about Solana-based options protocols, options markets, and writing options.
- Interested in permissions, community-owned financial service platforms.
- A Solana developer.
IEO completed? ✅ $PSY spot markets are going live on @FTX_Official tomorrow at 1400 UTC! https://t.co/Dqu80VguKB— PsyOptions (@PsyOptions) January 20, 2022
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